Sony Corporation (NYSE:SNE) (TYO:6758) BOD

The main item on the agenda is the election of the Board, including three new candidates – Joichi Ito (Director of the MIT Media Lab and an interesting choice), Eikoh Harada (Chairman, McDonald’s Japan) and Tim Schaaff (former head of Sony Network Entertainment, who had responsibilities now taken on by SCE President Andrew House). One of the first tasks of the incoming Board will be to consider Third Point’s proposal.

Damian Thong, CFA an analyst at Macquarie says in a new note that they do not think Sony will proceed with the entertainment business carve-out as proposed by Third Point pointing to management comments suggest that they are comfortable with the status quo. They believe there is a 1-in-5 in terms of imminent action (i.e. in one year), though the possibility in the longer term increases, with the Sony Financial Holdings IPO in 2007 as a precedent.

Third Point is upping the volume by announcing in a second letter that it had raised its economic interest in Sony to the equivalent of 70m shares (~7% exposure; 46m shares plus 24m shares via cash-settled swaps). Third Point has proposed, as part of the carve-out, that the entertainment business has a separate Board chaired by Mr Hirai to improve “discipline and accountability”.